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India’s biggest sign of economic distress; labour force shrinks to 8-month low in March, says CMIE

In the labour force market, the count of employed fell by 14 lakhs while the count of unemployed shrunk by 24 lakhs, CMIE said.

Labour force, unemployment, Indian Economy
India’s labour force fell by 38 lakhs in the month of March to the lowest level in the last eight months, says CMIE. (File: PTI)

India’s labour force fell by 38 lakhs in the month of March to the lowest level in the last eight months, comprising a decline in the count of both employed and unemployed, according to the Centre for Monitoring of Indian Economy. Labour force participation rate fell to 39.5 percent, lower than 39.9 percent in February and 39.6 percent in June last year. That there was no Covid-19 wave and few restrictions on mobility, the low labour numbers in March show India’s biggest sign of economic distress, CMIE added.

In the labour force, the count of employed fell by 14 lakhs while the count of unemployed shrunk by 24 lakhs, CMIE said. India’s labour force shrunk to 42.8 crore. “The fall in the absolute count of unemployed or the unemployment rate is not because more people got employed. We have already noted that employment actually fell in March,” CMIE said. “Millions left the labour markets, they stopped even looking for employment, possibly too disappointed with their failure to get a job and under the belief that there were no jobs available,” it added. While the decline in the LPR reflects the inadequacy of the growth in employment opportunities.

Jobs in manufacturing, construction sector fall

In the month of March, the share of non-agriculture jobs fell by a whooping 1.67 crore, which was offset by a rise in agricultural jobs of 1.53 crore. “Such a large increase in employment in agriculture is likely a seasonal demand for workers preparing for the rabi harvest. But, March is a tad too early for the rabi harvest. It is possible that a significant portion of the increase in employment in agriculture in March was disguised unemployment” CMIE said.

In terms of various sectors, the industrial sector fell by 76 lakhs, manufacturing jobs fell by 41 lakhs, construction sector jobs fell by 29 lakhs and the mining sector shed 11 lakh jobs. In manufacturing, the substantial drop was reported by fall in jobs in organised sectors such as cement and metals. The construction sector has recovered from the lockdown shocks but the jobs in the sector have stagnated. Retail trade, which reported a record 7 crore jobs last month, also witnessed a decline to 6.56 crore employed in March.

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